@ MidemNet: MPAA, RIAA, CEA Execs Clash Over DRM & Hardware Controls

[By Robert Andrews] This conference on the digital music business got off to a bang here in Cannes this morning when the opening-session discussion broke into a tense and sometimes bitchy disagreement about DRM between representatives from music, movie and electronics industry associations. MPAA executive vice president Fritz Attaway and RIAA chairman Mitch Bainwol immediately set their stall against Consumer Electronics Association president Gary Shapiro. A sample:

Attaway: “Technology should not be expected to respect existing business models, but the people who use technology have a responsibility to respect the rights of intellectual property owners. When one consumes a movie by viewing it, there is some obligation to compensate those involved in making it. It does cost a lot of money to make this product — there is no business model where one invests several million dollars in making a movie and then gives it away for free; that just doesn’t work for movies and it doesn’t work for music, too. Restrictions should not be put on technology, but they should be put on the people who use technology.”

Bainwol: “Technology is not a license to steal and it doesn’t sanitize theft. Technology needs to respect the law. It can challenge business practises [but] there is not an excuse to bypass the rule of law when you build a business model based on theft.”

Shapiro: “Consumers have certain rights to move content around their home. DRM is clearly desired by components of the motion picture and music industries, but consumers have started to revolt against it and you’re beginning to hear it. It’s confusing and resented by consumers. Business models are emerging and major record labels are starting to pick up on this. [If you drop DRM], you’re taking a risk that unethical consumers will spread the content around the world — but that’s a risk you’re going to have to take. … When the law penalizes so much, something is wrong and has to be changed. When consumers are afraid to do something for a school project because they’ve listened to the RIAA disinformation campaign, something is wrong. Consumers are rejecting DRM [because it’s confusing]. Independents and some major labels soon are going to be saying ‘no DRM on our products.’

Responding, Attaway said: “We are investing a lot of time and energy with Gary’s members to improve DRM. It needs to be better. We are all for technological innovations that make DRM more acceptable, allowing consumers to do more with their content but to also protect creators.”

The gloves quickly came off between Shapiro, whose association runs a campaign to brief consumers on what he calls the “facts” about copyright, and the two industry reps. Bainwol said the CEA president, because of his pleas to abandon restrictions and liberalize fair use policies, sometimes resembled “a fringe, ideological leader”: “We are in a very, very significant transition,” Bainwol said. “Technology is the basis of our future. We have to be able to monetise product and, every time we try, you want to make it available for free so people can buy devices. Gary stretches the concept of fair use to the point where the notion of ‘fair’ has been eliminated. You have to protect the market value. [Gary] wants to morph fair use into a concept that justifies any consumer behavior to the point where you eliminate the value of property. Kids grow up not understanding that music and movies are intellectual property. You teach disrespect for intellectual property. Gary takes a concept, morphs it, makes us look like we’re evil.”

Shapiro countered: “I don’t make you look evil – your lawsuits against old people around the country make you look evil. You’re very good at paraphrasing things I never said.”

Attaway: “The CEA has initiated this campaign against DRM which is against a lot of your your own members, who are making great strides in DRM to provide consumers with choices. You’re the one that is trying to stifle innovative technology and we’re trying to use it. Gary is trying to enact laws that limit the use of technology to create new business models.

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